Mortgage Delinquency Rate Continues to Plunge

2013 November 14 by

Report: Delinquency Rate Continues to Plunge

BY: ASHLEY R. HARRIS 11/13/2013

Homeowners are working harder to make timely mortgage payments, according recent data from TransUnion . The mortgage delinquency rate dropped 23.3 percent in the past year, ending Q3 2013 at 4.09 percent. Last year it stood at 5.33 percent. The mortgage delinquency rate also dropped on a quarterly basis, down 5.3 percent from 4.32 percent in Q2 2013, the seventh straight quarterly decline.

Around the United States, most states experienced a decline in their mortgage delinquency rate between Q3 2012 and Q3 2013. California, Arizona, Nevada, Colorado, and Utah experienced more than 30 percent declines in their mortgage delinquency rate. Three states—California, Florida, and Nevada—had double-digit percentage drops in the last quarter.

TransUnion cultivated the data from anonymized credit data from virtually every credit-active consumer in the United States. TransUnion’s forecast is based on various economic assumptions, such as gross state product, consumer sentiment, unemployment rates, real personal income, and real estate values. The forecast would change if there are unanticipated shocks to the economy affecting recovery in the housing market or if home prices begin to depreciate once again.

“This isn’t a sample data set,” said Tim Martin, group VP of U.S. Housing for TransUnion’s financial services business unit.

“We looked at all 52 million installment-based mortgages in the U.S. and the trend is clear—the percentage of borrowers willing and able to make their mortgage payments continues to improve,” Martin continued. “The overall delinquency rate is still high relative to ‘normal,’ but a 23 percent year over year improvement is great news for homeowners and their lenders.”

The credit agency recorded 52.31 million mortgage accounts as of Q3 2013, down from 54.23 million in Q3 2012. This variable was as high as 63.14 million in Q3 2008 prior to the housing crisis.

Viewed one quarter in arrears (to ensure all accounts are included in the data), new account originations increased to 2.34 million in Q2 2013, up from 2.09 million in Q2 2012. This is a major increase from just two years ago when there were 1.32 million new account originations in Q2 2010.

“New mortgage originations showed good growth through the second quarter of this year, largely the result of increased refinance transactions driven by low rates and increasing home prices,” Martin said. “However, mortgage rates started to increase right around Memorial Day, and when the data come out next quarter, we expect it to show that new originations are decreasing as a result.”

TransUnion’s latest mortgage report also found that the non-prime population (those consumers with a VantageScore credit score lower than 700) continues to represent a smaller portion of all mortgage loans, more than 50 percent lower than was observed in 2007. Non-prime borrowers constituted 5.82 percent of all new mortgage originations in Q2 2013. In Q2 2008, non-prime borrowers represented 12.69 percent of the total.

TransUnion is forecasting that the downward consumer delinquency trend will continue in the final three months of 2013. The delinquency rate will likely be just under 4 percent at the end of the year.

“New originations will be down and non-prime borrowers will start to re-emerge,” Martin said. “At this point we believe delinquency rates will continue to decline.”

©2013 DS News. All Rights Reserved.

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Scary Bogus Collection Calls From Someone Claiming To Be With the Government.

2013 November 8 by

A client of mine has been receiving calls at home and work from a “collection agency” saying they are going to haul him off to jail and press charges against him if he does not pay the money he owes.

When I called the number provided., 1-904-410-2217, I spoke with a man who put me on hold to transfer me to their attorney.   When the attorney picked up the line he sounded just like the gentleman who answered the phone.   Nevertheless, he claimed to be a lawyer with the Financial Crimes Enforcement Network  (see for the official government site).   He said his name was “George Schneider.”   He said he was being paid very well by the FinCen and didn’t need to speak with me.

Mr. Scneider, who sounded more like an Ahmed, refused to provide me with any information about the alleged case or crimes and told me he would only speak with a criminal lawyer.

I asked him for his attorney bar number.   He refused.

I asked him for the case or file number.  He refused.

I asked him for his address.   He refused.

I asked to speak with his supervisor.  He refused and got angry.

He demanded my client call him back personally or he was going to jail.

That’s NOT how an attorney reacts to another’s call in the real world.

This is a bogus off-shore collection call!

This is not the first one my clients have experienced.   I was fortunate to even speak with a real person.  Typically, when I call the “collection agency’s” phone number they will disconnect the call once they know I am an attorney.  When I call back, the number is mysteriously disconnected.

I googled the phone number and collectors like this one and found a Consumer Alert at

Here is what the web site says:

“FinCEN Warns of Ongoing Financial Scams (03.25.11)

FinCen (Financial Crimes Enforcement Network) recently sent out a reminder to the public to be on alert to ongoing financial scams that attempt to solicit funds from unsuspecting victims. They have received calls and reports of financial scams attempts conducted via the telephone. The caller represents themselves as an employee of FinCEN and ask for the victim by name, usually at the victim’s home telephone number. The caller will identify an outstanding debt; this debt may be actual or bogus. The call will provide the victim with account, Social Security or other similar number and demand that immediate payment be made. The caller’s knowledge of the victim’s name, telephone number, account description and personal information serves to legitimize the caller.

FinCen has become aware of another financial scam conducted via email and telephone in which a person claiming to be a representative of the U.S. Department of Treasury of FinCEN informs them that they have received a large Treasury Department grant. To obtain the grant, the victim is instructed to provide bank account information and make some type of initial payment or donation.

Recipients of these calls, letters, or emails should not respond to such messages, and should not send money or provide any personal or confidential information. Those who believe that they are or have been a victim of the financial scam, should report this information to local, State, or Federal law enforcement authorities.

FinCEN does not send unsolicited request and does not seek personal or financial information from members of the public. FinCEN does not have authority to freeze assets or block funds transfers. In addition, correspondence may purport to be from an overseas office of FinCEN. FinCEN does not have any offices outside of the US.”

Don’t tolerate this kind of abuse and criminal behavior.   Call your state and local authorities and report the call.  It’s a scam.


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HAMP’s Redefault Rate at 27% and Likely to Rise

2013 November 1 by


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Over the life of the government’s Home Affordable Modification Program ( HAMP ), 1.25 million homeowners have received permanent HAMP modifications, and 27 percent of those have later redefaulted on their loans, according to a quarterly report to Congress from the Office of the Special Inspector General for the Troubled Asset Relief Program ( SIGTARP ).

In its report released to lawmakers this week, SIGTARP berated Treasury for not heeding the office’s previous recommendations regarding HAMP , stressing that the inspector general expressed concern in April that “the number of homeowners who have redefaulted on HAMP permanent mortgage modifications is increasing at an alarming rate.”

About 184,000 homeowners (29 percent) who received HAMP modifications through TARP rather than through the GSEs have redefaulted, costing taxpayers $972 million in incentives paid to servicers and investors for those workouts, according to SIGTARP . Among borrowers participating in the GSEs’ HAMP programs, just under 154,000 (26 percent) have redefaulted ( HAMP incentives on GSE loans are paid by the GSEs themselves). Additionally, about 10 percent of all active permanent HAMP modifications were one or two months delinquent as of the end of August.

“The longer a homeowner remains in HAMP , the more likely he or she is to redefault out of the program,” SIGTARP stated. The redefault rate among the oldest HAMP modifications is 48.3 percent, according to SIGTARP’s report.

Homeowners who fall three months behind on their modified payments redefault out of the program and fall “often into a less advantageous private sector modification or even worse, into foreclosure,” SIGTARP said.

About 32 percent receive another modification, often a proprietary one, and about 13 percent work out a short sale or deed-in-lieu of foreclosure with their servicer. About 22 percent of HAMP redefaulters enter foreclosure.

SIGTARP also reported the breakdown of redefaults by servicer, finding that three servicers account for almost 60 percent of HAMP redefaults: Ocwen Loan Servicing, JPMorgan Chase, and Wells Fargo. While these three servicers contributed the greatest number of HAMP defaults, none of the three ranked highest in terms of the percentage of HAMP redefaults.

Among the eight largest servicers participating in the government program, Select Portfolio Servicing had the highest percentage of redefaults with 43 percent of its HAMP-modified loans falling behind on payments. Ocwen and Bank of America followed with 31 percent of their HAMP loans defaulting again. Twenty-five percent of Nationstar’s HAMP loans have redefaulted.

SIGTARP said in April that “Treasury still does not understand … the reason the permanent modifications in HAMP actually failed.”

The inspector general stated in the latest report to Congress, it was “a positive sign that following SIGTARP’s April 2013 recommendations that Treasury initially expressed its commitment to assessing and reducing redefault rates. . . . Following that, however, on July 22, 2013, Treasury posted a blog” defending the HAMP program and stating in the post, “mortgage modification programs include an inherent risk of homeowner default, given the difficult situations homeowners face when they seek assistance (like job loss).” In the same defensive posture, Treasury stressed “that not all will succeed” in the HAMP program.

For its part, SIGTARP said “ HAMP is a program that has been plagued with servicer misconduct” and recommended Treasury “research and analyze whether and to what extent the conduct of HAMP mortgage servicers may contribute to homeowners redefaulting” in order to ensure homeowners in HAMP are getting sustainable relief from foreclosure. SIGTARP charges Treasury with establishing a benchmark for redefaults, measuring the program against that benchmark, and revealing the results to the public.

Treasury has responded that “it cannot establish a benchmark without SIGTARP’s guidance,” to which SIGTARP responded, “it is up to Treasury to set performance standards for its own program and measure the participants’ performance.”

In its report to lawmakers, SIGTARP also revealed basic characteristics of HAMP modifications. The vast majority—95.9 percent—include an interest rate reduction. About 63.2 percent include a loan term extension, and 15.3 percent include principal forgiveness.

Treasury has extended the HAMP application period for two years until December 31, 2015.

©2013 DS News. All Rights Reserved.

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